Exactly a year ago, the doom-mongers were out in force. There were predictions of a slump in demand in the office sector. There was also uncertainty around the new government in the US.

Scare stories were circulated around automation, AI and the performance of the top five Indian ITES companies. However, despite all attempts to talk down the continued positive trajectory, it has been yet another positive year for the Indian commercial real estate sector.

From a macroeconomic perspective, 2017 was a good year for India. India’s ranking in the World Bank’s ‘ease of doing business’ index jumped to 100 in 2017 from 130 in 2016. The last quarter of the year saw an FDI investment of $85.79 billion; this was the highest-ever FDI investment in a single quarter.

The implementation of various game-changing reforms such as demonetisation, GST and RERA may have caused a few short-term hurdles for the nation’s real estate market, but they will surely result in a positive long-term impact and consolidation for the industry.

The commercial real estate market remained robust in 2017. Market reports indicate that the pan-India office take-up was in excess of 35 million sq ft, a level similar to that in 2016. There is certainly no sign of any slowdown in demand, which many had predicted only twelve months ago.

Co-working office space

This year, the co-working office space witnessed tremendous adoption. Initially pioneered by start-ups, entrepreneurs and freelancers to fulfil their need to work in a suitable cost-effective environment, we now see the trend extending to large occupiers, who are using co-working office spaces for their transitional office requirements.

As the real estate market continues to evolve under the impact of the regulations unfolded in 2017, the sector’s growth prospects in 2018 look bright. The upcoming year is expected to continue with the positive outlook for our commercial office business, which today stands at over 20 million sq ft, at an approximately 95 per cent occupancy rate and a development pipeline in excess of 15 million sq ft across South India.

From an investment perspective, we expect to see REITs coming to the market and transforming the way in which real estate is funded in India.

(The writer is CEO of Embassy Office Park)

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